Infosys AI Revenue Share Climbs to 8.2% in Q1 Even as it Lowers Guidance on Uncertain Demand

Infosys said artificial intelligence work now accounts for 8.2% of its revenue, as India's second-largest IT services company reported a 12.2% year-on-year rise in consolidated net profit to ₹7,769 crore for the June quarter (Q1 FY27), even as it trimmed the upper end of its full-year revenue growth guidance.

However, the net profit slid 9.3% sequentially.

Revenue from operations came in at ₹48,211 crore, up 14% YoY and only 3.9% quarter-on-quarter.

In dollar terms, the revenue was $5.082 billion, up 2.4% YoY and 1% QoQ. 

Infosys’ operating margin was 21.1%, an improvement of 30 basis points YoYr and 10 basis points sequentially. 

The company said large deal wins totalled $3.6 billion for the quarter, with 61% of that being net-new business, a signal of AI-linked engagements converting into fresh mandates rather than just renewals.

“We saw strong acceleration in our AI work with AI revenues at 8.2%. This is growing at double digits quarter-on-quarter for the last several quarters. With this momentum, we see long-term relevance of our services for our clients, which are all driven through AI,” Salil Parekh, CEO of Infosys, said in a press briefing.

Guidance Trimmed

Infosys narrowed its FY27 constant-currency revenue growth guidance to 1.5–3.0%, down from the 1.5–3.5% range it had given at its Q4 FY26 results in April, effectively a cut to the top end of the band. Operating margin guidance was retained at 20–22%.

“The upper end of the guidance was really based on whether the macro (factors) were improving. We now see the macro may improve, but not at the level that we were thinking initially, and so that's how we really constructed the guidance,” Parekh added.

The company also had a one-time revenue impact of a client decision during the quarter.

Leadership Transition

In a separate, significant announcement alongside the results, Infosys said its board has appointed Ashiss Kumar Dash, a three-decade Infosys veteran currently heading a diverse portfolio of industry verticals, as CEO Designate with immediate effect. 

Dash is set to take over as Chief Executive Officer and Managing Director from April 1, 2027, succeeding Salil Parekh, whose second term concludes after more than nine years leading the company.

AI at the Centre

Infosys affirmed that large deal wins were powered by Infosys Topaz, its AI-first set of services, solutions, and platforms. Like other IT majors, it plans to position forward deployed engineers into clients’ AI workflows as AI giants like OpenAI and Anthropic threaten to eat into the IT enterprise services revenue.

“We are building a team of frontier engineers to support client work. Our plan is to have 6,000 frontier engineers over the next few years. We built a platform, Topaz Fabric, that enables our clients to get the benefits of AI while keeping the sovereignty of their own data within their company,” said Parekh.

Infosys has signed several AI-linked collaborations during the quarter. 

This includes a renewed, expanded engagement with Mercedes-Benz Group AG to move its hybrid cloud and data-centre operations to an AI-led operating model, a tie-up with OpenAI to help enterprises move Codex—OpenAI's coding agent platform—from pilot use into large-scale deployment, spanning legacy code modernisation, code review automation, and vulnerability detection.

It has also collaborated with the US-based software delivery platform Harness for enterprise transformation and modernisation programs.

Geography and Headcount

Geographically, North America continues to dominate the topline, with 56.35% of revenue coming from the region. Curiously, contribution from India slid to 2.46% in Q1 FY27 from 2.88% in the comparable quarter a year ago.

The quarter also saw contribution from Europe increasing by a percentage point. 

Total headcount stood at 328,062 as of June 30, a marginal sequential decline of 532 employees but up 4,274 from a year earlier. Employee benefit expenses continued to be the major incurring costs, up 10.7% YoY to ₹25,287 crore.

Voluntary attrition ticked up to 13.0% from 12.6% in the March quarter.

Infosys’ shares closed marginally higher at the NSE on July 23 at ₹1,052.9 apiece.